Mainland China taxes luxury goods luxuriously, in much the same punitive spirit that America taxes nicotine. While it depends on the product category, the luxury tax hovers at around 17 percent, combined with an average income tax of 13 percent. Even many items that are “Made in China” are subject to these charges, as well as shipping expenses, as companies lack the authorization to ship directly to their Mainland outlets. China also offers many other expensive inconveniences.
Such costs are often passed on to consumers, despite the fact that even upper and upper-middle class Chinese consumers have vastly lower comparative and absolute spending power than their Western equivalents. Many brands charge 50 to 100 percent more in China than in Hong Kong, Europe or the U.S. For example, one well-known prestige market antiaging serum from an American brand costs $77.50 for a 1-oz. bottle in China versus $46.50 in the United States, a 66.7% markup.
Some say companies use pricing to position their brands as premium and raise prices because they can, a presumption of consumer naïveté. But that’s not likely to last long.
Says Estée Lauder’s China managing director Carol Shen, “Chinese consumers are becoming more sophisticated. Just as they demand better living standards, they also demand better quality products.” And as they get more sophisticated, no doubt they’ll start demanding more parity in pricing, too.
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For men’s fall 2018, @giuseppezanotti drew on elements from streetwear, sport, biker, combat and rock ‘n’ roll. Pictured here are a pair of shoes from the collection, featuring zippers, rhinestones, and silver hardware. Head to WWD.com to see a roundup of the accessories from Milan’s men’s fall 2018 shows. #wwdfashion (📷: Andrea Delb)
To celebrate the 25th anniversary of @ralphlauren’s snowboarding collection, the brand is mining its archives. The iconic brand is reintroducing vintage styles and dropping new designs for a color capsule that will be available in Ralph Lauren stores and @openingceremony on January 25. The capsule will consist of 10 pieces, including the Snow Beach Pullover, pictured here, which is a collector’s item that rapper Raekwon wore in Wu-Tang Clan’s “Can It Be All So Simple” video. #wwdfashion (📷: Tom Gould)
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“We tried to produce clothing of that couture quality, but the most daunting part was that we only had a matter of days [to do it],” said costume designer Lou Eyrich, who recreated Gianni Versace’s iconic looks for @americancrimestoryfx. Eyrich searched online retailers and vintage shops for original pieces from the design house and for @penelopecruzoficial, who plays Donatella Versace. Head to WWD.com to read how she created the Versace world. #wwdfashion
Only three months after her stellar debut catwalk season, @kaiagerber has inked her first big design collaboration –– with @karllagerfeld. The collection blends Lagerfeld’s Parisian chic aesthetic and the model’s signature West Coast casual style via RTW, accessories, footwear and more. The #KarlLagerfeldxKaia collection will launch in September with a series of events. Get all the details on WWD.com. #wwdnews #wwdfashion
Harrods plans to remove the famous statue of Princess Diana and Dodi Al Fayed from the bottom of the Egyptian escalators and hand it back to Mohamed Al-Fayed. “We are very proud to have played our role in celebrating the lives of Diana, Princess of Wales and Dodi Al Fayed at Harrods and to have welcomed people from around the world to visit the memorial for the past 20 years,” said Michael Ward, Harrods managing director. “With the announcement of the new official memorial statue to Diana, Princess of Wales at Kensington Palace, we feel that the time is right to return this memorial to Mr. Al Fayed and for the public to be invited to pay their respects at the palace.” More on the news, with reporting by @loreleimarfil, at WWD.com. #wwdnews